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Some companies run their own warehouse and DC facilities while others outsource some or all of their warehousing activity to reliable providers like DB Schenker through contract logistics arrangements. In these relationships, the provider manages activities like designing and planning supply chains; designing facilities; warehousing, transporting and distributing goods; processing orders and collecting payments; managing inventory and certain customer service activities.
“Our worldwide network covers more than 850 locations around 60 countries with a total warehouse space of more than 8.75 million square meters,” said Monica Franco, Vice President of Contract Logistics Business Development & Commercial Operations, DB Schenker Americas Region. “Whatever your industry, our warehousing and contract logistics solutions add value to your supply chain management process.”
6 Trends to Watch
Whether you operate your own warehouses or contract your logistics function out to a third-party, here are six top trends you’ll want to be aware of for 2022:
- AGV (Automated Guided Vehicles)/robots are becoming the norm. Conveyors have long played an important role in the movement of materials within warehouses and DCs, but we’re now seeing more portable plug-and-play mobile robots take their place. “This has evolved as a result of needing more effective use of space, a box that larger conveyor belt systems are unable to tick,” storage solution provider 2HSSL points out. “Smaller logistic operations are gravitating towards RaaS (Robots-as-a-Service) systems as a more efficient alternative.” In light of the persistent warehouse/logistics labor shortage, companies are also turning to automation to mitigate these labor constraints.
- Companies are developing more resilient distribution operations. The shock waves felt by many large retailers and manufacturers during the pandemic have pushed them to source from a broader pool of suppliers, which in many instances will be more localized. “As a result, these suppliers will have to introduce agile systems that enable them to meet the high expectations of large retail clients,” 2HSSL explains. To accommodate this shift, companies will have to upgrade their warehouse management systems (WMS), use scalable automation and hold more stock (which, in turn, requires additional warehouse space).
- The war for talent continues. “Everyone is learning how to do more with less through the current driver shortage, which will continue to delay companies looking to expand their fleet or increase capacity,” Overhaul’s Barry Conlon writes in Inbound Logistics. Unfortunately, Conlon doesn’t expect relief anytime soon, with nearly a quarter of the trucking workforce expected to hit retirement in the next decade—retirement accounts for 54% of the driver shortage, according to the National Transportation Institute. “It’s not just drivers, either. With so many container ships waiting off the coast of Long Beach, I wouldn’t be surprised to see a stevedore strike in the coming months. Supply chain professionals, who are seen as the gurus who can help organizations thrive through this crunch, remain in high demand.”
- Greener warehousing prevails. It’s not only a step in the right direction when it comes to helping the environment and projecting a positive brand image aware of customer concerns, but green warehousing can also help companies save money. “Lighting and heating are always two of the biggest expenses,” 2HSSL points out, “and there are a number of cost effective green changes that can be implemented to cut down these bills.” Warehouses and DCs can leverage these benefits by using LED lighting, installing solar panels and using green materials for expansions or new construction.
- Contract logistics is booming. Currently valued at about $190 billion, the global contract logistics market is in growth mode and on track to reach $245 billion by 2027 (based on a compound annual growth rate [CAGR] of 3.7%). Report Ocean says the market is being driven by an increase in trading volume, the need for better transparency in logistics and the use of advanced technologies for logistics management, among other factors.
- The infrastructure bill may help ease some supply chain pain points. The bipartisan Infrastructure Investment and Jobs Act provides for $1.2 trillion in federal spending over the next five years. The bill includes funding that addresses energy, transportation, and water, including $65 billion allocated for electric and grid infrastructure. Another $47.2 billion is dedicated to resilience, including cybersecurity. “We need new ships, new trains, new planes, new ports, and if we could create supply chain infrastructure overnight, that would relieve a lot of the capacity crunch,” writes Conlon, who admits that relief won’t come overnight. “There is no magic wand, and it’ll take time to catch up to the infrastructure we need.”
These are just some of the top trends to keep an eye on—and that DB Schenker will continue to closely track—as we move further into 2022. By staying in the know you can address any immediate warehouse or contract logistics challenges while also preparing for the future in a more educated, informed way.
